Donate to PEP

The Initiative for a Competitive Inner City’s (ICIC) study of the Prison Entrepreneurship Program’s (PEP) graduate entrepreneurs finds an annual economic impact of $122.5 million from the businesses that have been launched by these returning citizens. In addition, the estimated annual savings to taxpayers is over $4 million per year.

The situation for most returning citizens is dire. Across the country, between 60 percent and 75 percent of former convicts remain jobless a year after their release, according to the National Employment Law Project. This lack of economic opportunity drives a national recidivism rate that is in excess of 50% and a Texas prison recidivism rate for men of 24%. PEP’s success has resulted in a recidivism rate of 7% and employment rate of 100% within 90 days of release. This new ICIC study demonstrates the benefits of entrepreneurship and employment as a means to further reduce recidivism and create meaningful economic value and impact.

Creating Economic Opportunity for the Formerly Incarcerated

Since its inception in 2004, 2,180 individuals have graduated from PEP. Between 2004 and January 2018, PEP graduates have established 361 businesses. Fifty-seven percent of the businesses remain open today, which is higher than the average for Texas during the same time period (53 percent). In total, nearly one in four released PEP graduates have started a business.

Of the PEP graduates who do not start businesses, most are gainfully employed. In 2017, 67 percent of PEP graduates surveyed were employed, while 28 percent were entrepreneurs actively running a business and just 5 percent were unemployed.

Both PEP graduate employees and entrepreneurs earn significantly higher wages than the Texas minimum wage. The average wage of PEP graduate employees surveyed was $17.17 per hour, 137 percent greater than minimum wage. The average wage of PEP graduate entrepreneurs surveyed was $21.19 per hour, 192 percent greater than minimum wage. The average income of PEP graduate entrepreneurs was 276 percent greater than the average hourly earnings for formerly incarcerated men in Texas.

As one graduate entrepreneur interviewed by ICIC explained, entrepreneurship was the only pathway to financial security: “At the first place I worked at out of prison, I was told that the job paid $13 per hour, but with a felony only $10. I didn’t want to start a business for a few years, but decided I had to because it was the only way to financially survive. I’ve been able to buy a house and truck—I wouldn’t be able to afford these otherwise.”

Reducing Recidivism

Incarceration and recidivism are significant challenges in Texas, especially for men. Over 125,000 men were incarcerated in Texas in 2016 and 23 percent of males released from a state prison in Texas will return to prison within three years of release. In comparison, only seven percent of PEP graduates return to prison within three years of release.

PEP’s curriculum and leadership training is designed to help students develop re-entry plans and build hope, optimism and resilience. For many graduate entrepreneurs ICIC interviewed, they felt that the lifestyle changes they made while in prison were the biggest factors in reducing their chances of going back to prison.

As one graduate entrepreneur interviewed by ICIC explained, “Prison is detrimental to the extent that it does not require you to have a job or get through education. If it was up to me, everyone would have to go through PEP before coming home. It forces you to think about where you are in life and come up with a plan for yourself. To have a program where you can get away from prison and have people invest in you and empower you, it gives you an opportunity to have a voice. When you couple that with the networking side, the social side, it empowers people to take off the years of fear that prison gives you. I don’t have enough good things to say about the program.”

PEP Drives Growth in Texas

The economic impact of all active PEP businesses in Texas was measured using IMPLAN in partnership with the University of Massachusetts Donahue Institute.

In 2017, 357 PEP graduates were released from prison. The estimated fiscal impact per released graduate after one year was $12,053 in cost savings to the state and federal government. PEP’s annual program costs $2.7 million, which is fully funded by private sources, including corporate, philanthropic and individual donations. The one-year investment of $7,591 per released graduate by PEP donors results in a one-year “Return on Investment” of 159 percent. After five years, the “ROI” increases to 794 percent.

Policy Implications

PEP has demonstrated that entrepreneurship works as a deterrent for recidivism and should be considered as an alternative to traditional ex-offender workforce development and re-entry programs. Businesses created by PEP graduate entrepreneurs have a significant impact on their community and many operate in areas with limited economic opportunities and create jobs for formerly incarcerated individuals. It is a program worth replicating in other states dealing with high incarceration and recidivism rates.

Like this:

When I stepped out of prison after nearly 22 years, I did not know what was in store for me. The world had drastically changed while I was behind bars. People were talking to themselves — on cellphones — and racing past me as if I were standing still. Indeed, I was.

It was a happy occasion but a terrifying one at the same time. But there on the other side of the razor wire were my family, friends and brothers, the staff and fellow “returned citizens” (former prisoners themselves) of the Prison Entrepreneurship Program.

PEP provided a first meal (of my choice!) and a care package, life essentials including underwear and hygiene supplies donated by an executive volunteer who wanted me to make a fresh start.

More than 2,000 men who were former guests of the Texas Department of Criminal Justice have graduated from PEP to date, just like me. We just graduated our first cohort of 34 women this year. While in prison, each PEP graduate completes a nine-month course focused on character building, life-skills training and business development, culminating in a business-plan competition. In the Shark Tank-like panels, participants demonstrate their organizational, creative and presentation skills to real-life business leaders who volunteer to advise and judge their business ideas.

Program members then meet the graduates at the prison gates and continue to support and engage them through their re-entry process with housing, family reunification services, work opportunities, continuing education, and even networking and startup capital events to get their businesses off the ground. More than 350 enterprises have been started by PEP graduates, and over half of them hire additional employees, often other PEP brothers.

It has proven a tremendous success. For seven straight years, every single PEP graduate has been employed within 90 days of return, with most employed full time within three weeks. On average, they earn 60 percent more than minimum wage to start and see huge wage growth as they prove themselves able and industrious workers. (Almost all of them remain employed at 12 months from their hire dates).

Our volunteers, partner business owners and fellow PEP graduates consistently hire new PEP graduates precisely because they know that our graduates are motivated, empowered and appreciative of their second chance.

While Texas suffers from high rates of repeat crime and reincarceration, approximately 93 percent of PEP graduates remain free and productive citizens three years after their release.

Although we have a great partnership and cooperation with the TCDJ and officials of the facilities where we operate, PEP is completely free to the taxpayer. We survive exclusively on the generosity of our donors and volunteers.

But the secret sauce for PEP, which now operates in four prisons in Texas, isn’t complicated: It’s simply practical life skills administered with love and an abiding belief in the redemption of all. If any man or woman is ready and willing to commit to change, we seek to aid that person on the journey home toward a purpose-filled life.

My second chance has enabled me to rise to the level of chief executive of the very program that awakened great potential in me.

Bryan Kelley is chief executive of Prison Entrepreneurship Program and a graduate of the program. He wrote this column for The Dallas Morning News.

Share this:

Like this:

I am pleased to inform the PEP community of two major leadership changes for PEP in 2018:

Brandon Holcomb, long time PEP volunteer and Governing Board member, is succeeding Mike Humphrey as chair of the Governing Board. PEP has been blessed by Mike’s service on the board for the past 10 years and as Chair for the past 8, and Mike will continue to serve on the board through 2019. Brandon has served on the governing board for almost 7 years and has been an active supporter of PEP for at least 10. In addition, the board created a new position, the Vice Chair, and Pat Gotcher has been elected to that position for 2018. Pat will then succeed Brandon as Chair of the Governing Board in 2019.

Both Brandon and Pat continue PEP’s rich tradition of drawing talented, mission-minded volunteers from the business community. Brandon, who lives in Houston, is with the Investment Management Division of Goldman Sachs. Brandon is an active member of Grace Bible Church and is also on the Board of Trustees for The Center for Hearing and Speech. He is married and has three young sons. Pat, who lives in Ft. Worth, is a very successful executive and entrepreneur in the health care industry, and he and his wife, Amy, are active members of Arborlawn United Methodist Church.

Brandon shared the following about the transition from Mike Humphrey’s leadership, “Mike has led PEP with incredible wisdom and a true servant’s heart over many years. The dedication, passion, and love that he and Janene have generously given to PEP has changed countless lives and will have an eternal impact. It has been a great honor to learn from Mike and to serve alongside him.”

In order to strengthen PEP further in our push to achieve our goal to serve at least 10% of the men and now women released from TDCJ prisons in 2026, I have decided to step back from my role as CEO during 2018. I believe that what PEP needs at this point in its growth is a CEO that brings the personal story and passion that will be essential to converting vast numbers of ignorant or skeptical bystanders into the avid supporters needed by the PEP Revolution. The governing board has accepted my recommendation to name Bryan Kelley as my successor.

After serving 21 years in prison on his 40 year sentence, Bryan gave up an opportunity for parole so that he could participate in PEP. He graduated in June 2014, and was selected “Mr. PEP” by his peers because he modeled so completely all of our 10 Driving Values. Bryan began working as a Transition Coordinator for PEP in Dallas shortly after release 3 ½ years ago and was soon promoted to Re-Entry Manager. Since 2016, he has served PEP as Executive Relations Manager – North Texas. Bryan has a bachelor’s degree in psychology, is engaged to be married and is an active member at Watermark Church in Dallas.

Bryan has just begun serving as CEO Elect, and he will continue in his role as Executive Relations Manager – North Texas while we recruit his successor. During this transition period, Bryan will be spending more time in Houston to become fully versed in the issues and reporting that are an essential part of the CEO role and to allow me to introduce him to a number of our key foundation and other supporters. At some point later this spring, we will drop the “elect” from his title and he will assume the full responsibilities of the office. I will remain on staff at least for the balance of 2018, focusing primarily on teaching, transition housing and other projects that need special attention, and I will join the Governing Board in 2019.

Please join me in thanking Mike, Brandon, Pat and Bryan for their servant leadership – past, present and future. Also, I want especially to thank Phi, Tim and Tony for their support in this transition. A transition of this sort would be inconceivable were it not for the work that they have already done in positioning PEP for further growth and for their commitment to excellence going forward. As an entire team, I think we can confidently say that, for the PEP Revolution, the best is yet to come! Onward!

Like this:

Last Friday, Santa Claus took a break from his last minute preparations with a special early Christmas visit to the Cleveland Correctional Center. He met with every man on the unit, and thanks to Warden Upshaw, presented each man with a candy cane as he made the rounds. As he met each person his favorite line was, “I remember you, but probably haven’t see you since you were 6 or 7.” The men were excited to get their chance to say hello, and many of the men wanted to have their picture taken with Santa as well.

Santa is a new PEP volunteer named Ed Dolphin, and after his visit to Cleveland for the Business Plan Competition and Graduation, he was excited to return as his red suited, North Pole dwelling alter ego.

He brought a lot of Christmas cheer to everyone at Cleveland, and we thank him for making a diversion in his usual toy delivering schedule!

Thanks to the generosity of St. Luke’s United Methodist Church in Houston, more than 250 children of PEP men are having a brighter Christmas this year with clothing, toys, books and a few bicycles under the tree! The Children’s Christmas Project is an annual effort to bring Christmas joy to many children across Texas and in other parts of the US. This is the third year that St. Luke’s members have bought presents for PEP children during the month of November. A big wrap party was held at the church on December 9th and the gifts were distributed in time for Christmas. We thank everyone at St. Luke’s and particularly Meredith Davis and Alice King for their organization efforts, and Kristie Wisniewski and Edison Nguyen on the PEP staff for seeing the project through to completion.

To quote one mom, “You have no idea how big you made by baby smile. She is still trying on her clothes. The Hula Hoop…that will be an all-day thing. I wish you could feel the joy in my heart. Thank you from the bottom of my heart…one less stress for me.”

Share this:

Like this:

On Monday, December 11th, PEP staff and 10 dedicated volunteers introduced PEP to 58 curious women at the Lockhart Correctional Center about 45 minutes southeast of Austin. The women listened very attentively as each person shared their personal testimony and “Why PEP?” story. Excited by what they heard everyone submitted an application; 44 women qualified and will begin class next week!

But wait, there’s more! As word spread around the unit about PEP, another 160 women asked for an application and completed it and returned it to the warden! We are already planning for several more classes during 2018 in order to accommodate this demand.

Events will be held once a month from now until April 2018, when the first Business Plan Competition and Graduation will be held, and we are now recruiting volunteers. You can find more information at www.pep.org/take action. Join us!

Like this:

95 men and more than 90 executive judges joined us for two days at Cleveland as we heard pitches on a wide variety of businesses including lawn care and feeding, oil field vending and supply, and a curriculum specifically designed to help youth that are already caught up in the juvenile justice system.

More than 300 family members arrived at Cleveland after a snowy start to Friday to join their men and celebrate their 9 months of hard work. There were family members from across Texas, and also a few who had made their way from New York and Oregon!

The finalists of the Business Plan Competition were Jacob F., Julian R., Lucas T. and the winner was Terrence S. with AYM for Success!

The other graduates of the Legends of the Fall ’17 that were recognized for their efforts during class were: